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Shares stumble as US yields rise; pound flat after BoE hike

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Shares stumble as US yields rise; pound flat after BoE hike
© Reuters. FILE PHOTO: Passersby are reflected on an electric stock quotation board outside a brokerage in Tokyo, Japan April 18, 2023. REUTERS/Issei Kato/file photo

By Lawrence Delevingne and Tom Wilson

(Reuters) – World share markets stumbled on Thursday as U.S. bond yields hit nine-month peaks, with the dollar shrugging off a U.S. credit downgrade to hit a four-week high and the British pound flat after an initial drop on the Bank of England raising rates.

Wall Street added to a wave of selling a day earlier, with the down 0.27% to 35,186, the 0.31% lower at 4,499 and the dropping 0.12% to 13,956.00.

Pressuring stocks were mixed earnings, a climb in long-term U.S. Treasury yields after stronger-than-expected private employment data, and the announced refunding of the U.S. government’s maturing debt.

U.S. 10-year yields hit a new nine-month peak of 4.17%, while 30-year yields rose to a fresh nine-month top, up 11.9 basis points to 4.284%.

That helped the dollar stay buoyant near a one-month high at $102.450 against major peers. The strong private payrolls data added to signs of U.S. labor market resilience, with the nonfarm payrolls report due on Friday. [FRX/]

Investors also digested new U.S. Labor Department data on Thursday showing that the number of Americans filing new claims for unemployment benefits rose slightly last week, while layoffs dropped to an 11-month low in July. The government also said that U.S. worker productivity rebounded sharply in the second quarter, another boost to the improving inflation outlook.

EURO SHARES DOWN

European shares slipped 0.8%, bruised by disappointing earnings reports and elevated U.S. bond yields, putting them on course for their third straight day of losses.

UK shares, however, initially ticked higher after the Bank of England raised its key interest rate by a quarter of a percentage point to a 15-year peak of 5.25%. The index was last down 0.6%.

Sterling was last trading flat after falling as much as 0.7% following the BoE move.

The BoE decision was closely watched for clues on how central banks globally will balance taming inflation and maintaining growth. The BoE’s monetary policy committee (MPC) was split on the size of the rate hike.

“This split does leave a sense that the MPC itself is uncertain over what to do,” said Stuart Cole, chief macro strategist at Equiti Capital, “and indeed of how much of a danger the UK economy is at risk of being tipped into recession as monetary policy is tightened ever further.”

APPLE, AMAZON AHEAD

Investors were awaiting earnings results from Apple (NASDAQ:) and Amazon (NASDAQ:) that may give clues on whether the tech sector’s sky-high valuations are justified.

Apple is expected to report the largest third-quarter drop in its revenues since 2016 as iPhone sales slow.

Amazon, a bellwether for consumer spending, is expected to report a more than 8% rise in second-quarter revenue, aided by a recovery in the advertising and e-commerce businesses.

In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.2%, extending losses after a drop of 2.3% a day earlier.

Still, Chinese blue chips rose 0.9% after a private survey showed China’s services activity expanded at a faster place in July.

Analysts at Morgan Stanley (NYSE:) downgraded China shares to equal weight, given the still-negative earnings revisions and weak return on equity and profit margins.

OIL UP, GOLD STEADY

Oil gained after dropping sharply from more than three-month highs in the previous session after Saudi state news agency SPA said that the country will extend a voluntary oil output cut of 1 million barrels per day for another month to include September.

rose 1.74% to $80.87 per barrel and was at $84.46, up 1.51% on the day.

Gold was steady after data showing a deterioration in euro zone business activity triggered some safe-haven inflows, but bullion held near three-week lows on a stronger dollar and higher bond yields.

ticked up 0.2% to around $1,938 an ounce, held in check by a robust dollar and elevated bond yields.

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Consumers Energy Expanding Community Solar Program with 30-Acre Solar Project in Jackson County

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JACKSON, Mich., Sept. 19, 2024 /PRNewswire/ — Consumers Energy plans to break ground next spring on Blackman Solar, a new 30-acre community solar array in its home Jackson County that will provide local clean energy to customers through its Solar Gardens program.

Consumers Energy this week received approval from Blackman Township for the community solar project, which is slated to start generating electricity by the end of 2025.

“Blackman Solar is a great example of a partnership with a community to develop a project that delivers reliable, clean energy as well as local tax and economic benefits,” said David Hicks. Consumers Energy’s vice president of renewable energy development. “We’re grateful for the reception we’ve received from Blackman Township leaders and are excited to continue developing solar projects like this on our path to a carbon-neutral electric grid.”

Blackman Solar will generate power for Consumers Energy’s Solar Gardens community solar program, in which customers choose to support new solar projects without having to own solar arrays.

The new community solar facility will be the fourth that Consumers Energy owns and operates, joining other Solar Gardens projects in Cadillac, at Western Michigan University and at Grand Valley State University. Blackman Solar will include nearly 5,000 solar panels and will generate up to 2.5 megawatts of renewable electricity for 2,500 future Solar Gardens customers.

Blackman Solar also will provide new capacity to expand Consumers Energy’s income-qualified Solar Gardens program MI Sunrise. MI Sunrise is an efficient, easy, cost-effective way for municipalities, nonprofits and tribal governments to deploy federal grant dollars, providing access to clean, reliable renewable energy and measurable financial benefits to offset energy bills.

“Blackman Solar will help meet increased demand for community solar and offers shared solar infrastructure, accessibility and inclusivity, as well as financial and environmental benefits for all customers,” Hicks said.

Consumers Energy is committed to Michigan’s clean energy future. The energy provider is closing its final three coal-burning units next summer, one of the nation’s most aggressive timetables. The company is developing solar projects as part of its Clean Energy Plan to be carbon-neutral by 2040.

Consumers Energy is Michigan’s largest energy provider, providing and/or electricity to 6.8 million of the state’s 10 million residents in all 68 Lower Peninsula counties. Consumers Energy’s Clean Energy Plan calls for eliminating coal as an energy source in 2025, achieving net-zero carbon emissions and meeting 90% of customers’ energy needs through clean sources, including wind and solar.

For more information about Consumers Energy, go to ConsumersEnergy.com.

Check out Consumers Energy on Social Media

Facebook (NASDAQ:): https://www.facebook.com/consumersenergymichigan
Twitter: https://twitter.com/consumersenergy
LinkedIn: https://linkedin.com/company/consumersenergy
Instagram: https://www.instagram.com/consumersenergy

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First Horizon Is Now the Official Bank of the Ragin’ Cajuns

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MEMPHIS, Tenn., Sept. 19, 2024 /PRNewswire/ — First Horizon (NYSE:) Corp. (NYSE: FHN or “First Horizon“) is proud to announce that First Horizon Bank is now the Official Bank of the  University of Louisiana at Lafayette  Ragin’ Cajuns.

This five-year agreement expands First Horizon’s long-term commitment to the University  and includes a Ragin’ Cajun Visa (NYSE:) Debit card, prominent in-venue signage, entertainment and hospitality opportunities along with participation in game day fan activations and experiences, including the new Cajun Village.

“This is an exciting time to expand our partnership with ULL and ULL athletics,” said Jerry Prejean, President of Acadiana for First Horizon. “With more than $2.5 million invested in recent years towards academic and athletic excellence, First Horizon is proud to deepen our relationship with the University and work together as two long-standing community leaders dedicated to making Acadiana a great place to call home.”

“As opportunities have grown for businesses to support Ragin’ Cajuns athletics, First Horizon Bank has been right there growing with us every step of the way,” adds Brian Bille, General Manager of LEARFIELD-based Ragin’ Cajuns Sports Properties. “Jerry’s commitment to our community has never wavered, and I’m excited to help First Horizon build affinity with our fans through this enhanced partnership, and encourage our fans to add the all-new Ragin’ Cajuns branded debit card to their wallet.”

About First Horizon  
First Horizon Corp. (NYSE: FHN), with $82.2 billion in assets as of June  30, 2024, is a leading regional financial services company, dedicated to helping our clients, communities and associates unlock their full potential with capital and counsel. Headquartered in Memphis, TN, the banking subsidiary First Horizon Bank operates in 12 states across the southern U.S. The Company and its subsidiaries offer commercial, private banking, consumer, small business, wealth and trust management, retail brokerage, capital markets, fixed income, and mortgage banking services. First Horizon has been recognized as one of the nation’s best employers by Fortune and Forbes magazines and a Top 10 Most Reputable U.S. Bank. More information is available at  www.FirstHorizon.com.

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Oil prices rise on easing demand worries after jumbo Fed rate cut

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Investing.com — Oil prices jumped Thursday, riding on a wave of risk-on sentiment as the Federal Reserve’s outsized interest rate cut on Wednesday eased worries that a slowing US economy would further dent crude demand.

At 2:06 p.m. ET (1906 GMT), rose 1.6% to $74.80 a barrel and rose 1.8% to $71.12 a barrel. 

Jobless claims rise by less than expected 

The number of Americans filing for first-time unemployment benefits rose by less than anticipated last week, with coming in at 219,000 in the week ended on Sept. 14, compared with an upwardly revised 231,000 in the prior week.

Economists had forecast a consensus figure of 230,000.

This figure was better than expected, and has allayed to a degree concerns over the health of the US economy, particularly after the Federal Reserve started its latest rate-cutting cycle on Wednesday, trimming interest rates for the first time since March 2020 by a hefty 50 basis points to a range of 4.75% to 5%.

While lower rates usually bode well for economic activity, the Fed’s aggressive cut sparked some concerns over a potential slowdown in economic growth. 

While Fed Chair Jerome Powell helped soothe some of these concerns, he also said that the Fed had no intention of returning to an era of ultra-low interest rates, and that the central bank’s neutral rate was likely to be much higher than seen in the past.

His comments indicated that while interest rates will fall in the near-term, the Fed was likely to keep rates higher in the medium-to-long term.

US inventories fall, but product stockpiles up 

Government data released on Wednesday showed a bigger-than-expected, 1.63 million barrel draw in .

While the draw was much bigger than expectations for a draw of 0.2 mb, it was also accompanied by builds in and inventories. 

The builds in product inventories sparked increased concerns that U.S. fuel demand was cooling as the travel-heavy summer season wound to a close. 

Looking ahead, some expect further draws in domestic crude stocks as exports reaccelerate. 

“We look for a significant rebound in exports across crude and products this week. Among products, our preliminary expectations point to draws in gasoline (-1.5 MM BBL) and distillate (-3.7 MM BBL) with a build in jet (+0.5 MM BBL),” Macquarie said in a recent note.

Crude deficit could boost Brent 

Still, prices could be bolstered in the near-term by demand possibly outstripping supply in the fourth quarter, according to analysts at Citi.

A reported decision by the Organization of the Petroleum Exporting Countries and its allies to delay the beginning of a tapering in voluntary output cuts, along with ongoing supply losses in Libya, is predicted to contribute to a oil market deficit of around 0.4 million barrels per day in the final three months of 2024, the Citi analysts said.

They added that such a trend could offer some temporary support to Brent “in the $70 to $75 per barrel range.”

Meanwhile, the benchmark could be further boosted by a potential rebound in recently tepid demand from top oil importer China, the analysts said.

But they flagged that they still anticipate “renewed price weakness” in 2025, with Brent on a path to $60 per barrel due to an impending surplus of one million barrels per day.

(Peter Nurse, Ambar Warrick contributed to this article.)

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